Trade Deficit or Energy Costs Could Derail Growth, G-8 Says

By ANDREW E. KRAMER

Published: June 11, 2006

The world economy is growing at a healthy pace but could be derailed by the United States' huge trade deficit or the ill effects of high energy prices, according to a statement issued Saturday by finance ministers from the Group of Eight wealthy industrial nations.

They met in St. Petersburg after a week of stock market sell-offs in which the Dow Jones industrial average plunged to its lowest point in a year amid fears of inflation and higher interest rates. It came as no surprise that the ministers tempered their upbeat assessment with language suggesting a wobbly foundation.

''Downside risks from high and volatile energy prices and widening global imbalances remain,'' the ministers said in the joint statement, which did not vary much from a similar document released in February.

The statement called for greater investment in oil field development as a long-term solution to high energy prices. More investment would bring more oil onto the market and eventually lower prices at the gas pump, the statement suggested.

The departing United States treasury secretary, John W. Snow, gathered with colleagues from Canada, Japan, Britain, France, Germany, Italy and Russia in Mikhailovsky Palace, a recently restored landmark.

In a month, St. Petersburg will be the setting for a summit meeting of the Group of Eight leaders including President Bush.

Russia, which will be the host of a G-8 summit conference for the first time, chose energy security as its theme. Ministers in Vladimir V. Putin's government have said it is committed to ensuring stable oil prices for big consuming countries like the United States, making a promise of price relief through greater supply -- but with a catch.

Russia wants the large consuming countries to open their energy retail and distribution markets to Russian companies in exchange for allowing foreign investment here.

This quid pro quo idea is expected to be a sticking point as the summit meeting approaches, with Great Britain and other European nations resisting efforts by Russia's state-owned Gazprom monopoly to buy other energy companies in Europe.

Mr. Putin recently compared Russia's potential to increase energy production to a piece of candy the whole world wants. But he said it would be held in Russia's ''sweaty fist,'' unless other countries were willing to offer investment opportunities in return.

The Kremlin is reluctant to open its energy sector to foreign investments. A new law would ban foreign ownership of big oil fields and Parliament is considering enshrining Gazprom's monopoly on natural gas pipelines in law.